Source: The post China tries to block India from rising in manufacturing has been created, based on the article “Decoding China — the lessons for a vulnerable India” published in “The Hindu” on 7th August 2025. China tries to block India from rising in manufacturing.
UPSC Syllabus Topic: GS Paper 2- Effect of policies and politics of developed and developing countries on India’s interests.
Context: The sudden withdrawal of over 300 Chinese engineers from Foxconn’s iPhone 17 plants in India has raised alarm. More than an internal reshuffle, this move signals a calculated Chinese strategy to stall India’s manufacturing rise and protect Beijing’s dominant regional economic position.
For detailed information on China blocks Foxconn shift and India gains global ground read this article here
China’s Strategic Withdrawal and Resource Control
- Targeted Recall of Technical Expertise: The removal of trained Chinese engineers hampers India’s ability to absorb critical manufacturing know-how. These specialists were vital for establishing advanced production systems and facilitating technology transfer.
- Restricting Key Mineral and Equipment Exports: China has restricted exports of vital minerals such as gallium, graphite, and rare earths, essential for EVs and electronics. It has also imposed informal curbs on high-end capital equipment, further limiting India’s industrial capability.
- Disrupting India’s Supply Chains Subtly: Many restrictions are informal—executed via verbal instructions or bureaucratic delays. This non-transparent approach effectively raises uncertainty, costs, and dependency in Indian manufacturing.
- Preventing Technological Self-Reliance: The overarching goal is to block India from developing an independent, high-value manufacturing base. By withholding tools, skills, and materials, China maintains India’s reliance on Chinese systems and products.
Motivations Rooted in China’s Economic Fragility
- Dependence on Export Revenues: Facing demographic decline, a property crisis, and falling domestic demand, China is increasingly reliant on exports to sustain economic stability and fund its social systems.
- Managing Structural Imbalances: China’s trade surplus reflects its industrial overcapacity and poor internal consumption. To sustain production, it undercuts global prices, pushing out rivals and preserving export volumes.
- Internal Pressures Shaping External Moves: Beijing’s moves against India stem not just from rivalry but internal compulsions. If India succeeds in becoming globally competitive, China may resort to stronger measures, including economic coercion or even military pressure.
- Western Signals and Strategic Doubts: U.S. tariff hikes on Indian goods, while sparing China temporarily, weaken India’s appeal as an alternative supply chain hub. This underscores the unpredictability of global alignments and the need for India’s strategic autonomy.
Beijing’s Control of Global Supply Chains
- Dominance Across Emerging Technologies: China controls key sectors like AI, 6G, EVs, and quantum computing. It shapes global supply chains and turns its production scale and overcapacity into instruments of power.
- Using Overcapacity as a Weapon: Firms like BYD flood global markets with low-cost products. This strategic dumping suppresses competition and reinforces China’s industrial dominance.
- Economic Statecraft in Action: Price suppression and export-led tactics are not isolated business strategies but deliberate statecraft. China defends its markets and marginalises competitors before they can gain scale.
India’s Industrial Challenges and Lessons
- Dependence on Foreign Inputs: India still relies on imports for basic components like semiconductors, chips, and engines. Even basic assembly operations need external help, showing gaps in capability.
- Systemic Hurdles to Growth: Infrastructure gaps and bureaucratic inefficiencies continue to limit India’s ability to scale manufacturing. The ambition to lead remains hindered by on-ground realities.
- Reality Check on Global Competition: India’s challenge to China is more aspirational than real for now. China’s moves are defensive but calculated—aimed at stalling long-term threats rather than countering an immediate rival.
- Need for Strategic Focus: India must focus on strengthening its fundamentals. Competing with China requires self-sufficiency, efficient systems, and reduced import dependence—not just global goodwill.
India’s Road Ahead
- Lessons from Beijing’s Moves: China’s aggressive posture teaches India the importance of internal strength. Without robust domestic capacity, India’s manufacturing dreams will remain vulnerable to external manipulation.
- Strategic Autonomy is Essential: To avoid being caught in global power games, India needs to chart its own course—building resilience, investing in critical capabilities, and reducing strategic dependencies.
Question for practice:
Examine how China is using economic tools to hinder India’s rise as a global manufacturing hub.
